cross-border infrastructure: a toolkit session 0: program overview regional integration in asia: an...

Session 0: Program Overview

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it Regional Integration In Asia:An Overview

Session on Planning & Policy

Rita NangiaAsian Development Bank

The views expressed here are those of the presenter and do not necessarily reflect the views or

policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they

represent.


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itSession Description

• In the last two decades, regional integration has been taking root in the Asian region.

• This session presents:An overview of the trends in regional integration in

Asia, andA comparison with other regional blocks.


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itOverview

• Asia’s economic growth• Trade in Asia

Major trends Role and dominance of People’s Republic of China

• Regional integration Post crisis trends Historical trends

• Investments Emergence of production networks

• What does it mean for cross-border infrastructure? Need for greater cross-border connectivity Multimodal infrastructure development Policy and institutional development


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itEconomic Performance

• Rapid and sustained growth

Asia is growing rapidly*GDP growth rate, 2003

% per annum

Source: World Development Indicators, 2005


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• Rapid and sustained growth• Impressive performance in poverty reduction

Poverty is declining%

Source: ADB Key Indicators 2005


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• Rapid and sustained growth

• Impressive performance in poverty reduction

• Trade and investments important drivers of such

phenomenal Asian success

Growth is reinforced by trade, and in turn

Trade is creating new economic opportunities


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itPoverty Outlook

• Nearly 300 million were able to rise above $1 day poverty line during 1990-2003

• Trends expected to continue -Asia’s level of poverty in 1990 - 34.3% Its level of poverty in 2003 - 19.3%By 2015 significant decline is expected

Projected poverty in Asia - 2.9% to 9.3% depending on the pace and quality of economic growth

Source: ADB Key Indicators 2005


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itGains From Trade

• Major gains in global trade Exports from Developing Asian countries grew from

$162 billion in 1980 to $1.9 trillion in 2004*

• Trade openness a major criteria Reduction in tariff and non tariff barriers

• Phenomenal growth in intra-region trade Region is more integrated than most trade blocks Production networks around region PRC both a destination of exports and also a market for

exports from East Asia

• Attracting foreign direct investments

Source: H. Kuroda, M. Kawai and R. Nangia. Infrastructure and Regional Cooperation. Paper prepared for the Annual Bank Conference on Development Economics, Tokyo, 2006


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itTraditional Trading Pattern*

Importing developed country

Exporting developing country

South-South trade: 0South-North trade: 100Developing-country exports: 100

Source: UNCTAD Trade and Development Report, 2005


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itTriangular Trade Under Production-Sharing*


Developing-country assembler of parts &

components, producing final product



Developing-country producer of parts &

components

Trade value

$ 90

Trade value: $ 100


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itTriangular Trade Under Production-Sharing

With Transhipment*




Developing-country assembler of parts &

components, producing final product

Developing-country producer of parts &

components

Trade value

$ 88

Trade value: $ 100

Transhipment port

Trade value

$ 90

$ 98


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itRegional Integration In Asia

• A shift from trade liberalization to economic integration after crisis

ASEAN formed in 1960s

• Market vs. policy driven regional integration

• Focus on trade and non trade barriers Policy harmonization Asia’s regional integration based on competitiveness Intra-industry trade growing Added advantage to foster global integration

• Increased FDI driving integration


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itForeign Direct Investments

• Large volume of FDI Economic reforms of 1980s and early 1990s Japan and newly industrializing economies building

forward and backward linkagesPRC a major destination of FDI

• High savings and investment rates


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itAverage Savings and Investment

(% of GDP 1990-2004)

Source: World Development Indicators, 2005


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itWhat Is Needed

• Demand for both intra regional and non-regional infrastructure increasing rapidly

• Need for better connectivity for exports and imports within region especially connecting PRC

• Feeder ports and regional hubs

• Cross-border corridors

• Efficiency improvements - in time delivery

• Soft aspects - efficient customs clearance, electronic documentation and integrated logistic provisions

• Human capital development and ICT


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itKey Messages

• Early Asian integration was largely market-driven.

• These trends underwent a transformation in the 1990s, particularly during the Asian crisis of 1997-1998.

• Conscious economic and monetary cooperation with institutional support has increased considerably.

• Asia-Pacific economies are more committed to regionalism - both economically and institutionally - now than ever before.

• There are significant efficiency gains possible by planning and promoting infrastructure development to play a major role in further integrating Asia.

cross-border infrastructure: a toolkit session 0: program overview regional integration in asia: an...

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